Iowans will likely notice a slight uptick in the cost of video-streaming subscriptions, online purchases and ridesharing services this month.

That's because the state's sales tax on internet purchases starts this month.

In 2018, the Iowa Legislature rewrote the state's tax code, slashing income taxes by more than $2 billion. But those tax changes also included new taxes on certain "new economy" services and an expansion of sales taxes for online purchases.

Iowa previously collected sales tax only from online retailers that operated brick-and-mortar stores within the state. So, purchases on Target's website were subject to the state's 6 percent sales tax, but online orders from eBay would have been tax-free.

"In general, the intent was to try to make the sales tax code match the modern economy," House Ways and Means Committee Chairman Rep. Guy Vander Linden, R-Oskaloosa, said in April. "What's the difference between downloading a movie and checking out a disc at a Redbox? We’re just trying to make everything as consistent as we can."

The effect on consumers won't be massive: It will add $1.20 to a $20 Uber ride or an extra 66 cents on a $10.99-per-month Netflix subscription.

But the revenue department expects to see significant revenue growth from the collective changes.

The department expects to raise $66.7 million in new revenue in fiscal year 2020 from the sales tax changes. By fiscal year 2024, those changes should add $177.8 million in new revenue.

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